Can you get out of debt with a payday loan?

When you are in debt, it’s sometimes important for you to take care of it immediately. You may be willing to take up another debt by taking out another loan just so you can deal with the current debt. If having instant cash is what you need, then payday loans might be the thing for you, though using a payday loan to get out of current debts might get you into even more trouble.

  • What is a payday loan?

Payday loans are monetary loans

Payday loans are monetary loans

Payday loans are monetary loans provided to borrowers that must be paid in full when the borrowers receive their next paychecks. The loan amounts granted are typically small and are based on how the borrower’s salary.

Taking out a payday loan is certainly one of the fastest and best ways to get instant cash. No matter what your emergency is, applying for a payday loan will get you the needed money in no time. Since the service is really fast and easy to get approval for ( bad credit is almost never an issue as you can take out a bad credit payday loan just as easily), payday loans have very high interest rates which are higher than conventional bank loans. This is because of the risk that payday lenders take by not seeking collateral from borrowers, lending money to applicants with bad credit history and only asking for basic personal information. With payday loans, the borrower usually borrows an amount of money that he can repay on his next payday. Being late in repayment is not a good idea as that will incur heavy penalties.

  • How much can you borrow?

Usually up to $1,000, though some lending companies restrict the size of the first loan they offer. Loan tenures could be less than a week or months occasionally. There are usually no early repayment charges, but there are fees for setting up the loan as well as interest which is usually calculated daily.

  • So, can you get out of debt with a payday loan?

The answer is yes. However, there is another important question you have to ask yourself and that is, should you get a payday loan to fix your debt?  The answer for that question is entirely dependent on your situation. If you are very sure that you can repay that loan on your next pay day, then go for it. However, if there is even a hint of doubt, or you are just hoping that things just might somehow come together in a way that you’ll be able to repay the debt, it’s best that you look for other options.